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Suryalakshmi Cotton Mills Ltd.

BSE: 521200 Sector: Industrials
NSE: SURYALAXMI ISIN Code: INE713B01026
BSE 00:00 | 18 Feb 27.90 0
(0.00%)
OPEN

30.00

HIGH

30.95

LOW

25.10

NSE 10:27 | 20 Feb 28.80 0.05
(0.17%)
OPEN

28.45

HIGH

29.45

LOW

28.45

OPEN 30.00
PREVIOUS CLOSE 27.90
VOLUME 2584
52-Week high 82.75
52-Week low 25.10
P/E
Mkt Cap.(Rs cr) 47
Buy Price 26.20
Buy Qty 100.00
Sell Price 30.00
Sell Qty 100.00
OPEN 30.00
CLOSE 27.90
VOLUME 2584
52-Week high 82.75
52-Week low 25.10
P/E
Mkt Cap.(Rs cr) 47
Buy Price 26.20
Buy Qty 100.00
Sell Price 30.00
Sell Qty 100.00

Suryalakshmi Cotton Mills Ltd. (SURYALAXMI) - Chairman Speech

Company chairman speech

Dear Shareholders

It gives me immense pleasure to present in front of you the Annual Report 2017-18 ofSuryalakshmi Cotton Mills Limited. During the year as the Indian economy moved towardsGoods and Service Tax (GST) short term impact of the new tax regime led to fall in growthrate from 7.1% in 2016-17 to 6.6% in 2017-18.

During the year cotton prices were on a rise along with a fall in cotton production.This happened mainly due to pink ball worm attack affecting the quality of cotton harvest.The financial year under review was a challenging one for the textile industry of India.

Over the years the Indian textile industry has experienced a growth in demand both ondomestic and exports side. Indian textile industry contributes 4% to the country's GDP andstands as the third largest exporter to apparel industry of the world. During the yeargrowth of textile industry was disrupted by various setbacks such as demonetization andGST. The cash crunch that entered during November 2016 continues to affect theperformance of labour intensive industries like textile. The country as a whole hasstarted to recover from the negative impacts of demonetization but cash based industrieslike textile will take time to experience a revival in its operations.

GST that was introduced during June 2017 has affected all industries across thecountry. Textile industry was one of the most hit amongst all the industries. The dealerswhich were not registered under VAT are yet to register themselves under GST. This hascreated a gap for input tax credit throughout the value chain. The government hadintroduced refund for exports under GST which first appeared to be a way to boostexports has turned out to be a challenge. Delay in refund from exports has posed achallenge on working capital. To overcome the effects of demonetization and GST manycompanies started exporting. This led to a situation where there was price competitivenesscoupled with a fall in margins.

Our export to Bangladesh contributes 51% to our export revenue which was affected bydelay in approval of Letters of Credit from banks. This further affected our workingcapital and coupled with delay in refund of GST and other government subsidies like TUFSindustrial subsidies etc. resulted in increase in our short term borrowings.

Over the years we have experienced an increase in demand for textile and apparelindustry of India. Despite this we faced a sales drop in domestic region as there was anincrease in textile imports from Bangladesh and Sri Lanka. In post-GST Scenario importsfrom Bangladesh grew by around 56% during July-November 2017 as compared to same periodlast year due to F.T.A.

Despite the various challenges faced by us we experienced a sales volume growth of 19%in denim exports and recorded a strong revenue from operations of H76058.53 lakhs. Weexperienced a growth of 7.34% and 10% in the revenue of spinning business segment andgarment segment respectively. During the year the trade receivables rose by 35.44%resulting in an increase in current assets by 17.26%. A rise in our total expenses drovedown our profit after tax to H515.05 lakhs.

Going ahead we expect the economy to stabilize in next financial year as the governmentwill take steps to solve technical problems involved in refund for exports and GST filing.We expect that as stabilization will take time the short term challenges will continuetill first half of financial year 2018-19. We will continue to expand ourselves whiledelivering results. In the coming years we will also introduce new high marginvalue-added products that will help us to increase our margins. With a vision to be aglobal leader and deliver to some of the leading brands in the world we will move towardsincreasing our exports.

We look forward to overcome the obstacles and continue on our growth path in the nextfinancial year. With innovation and providing quality products to customers we will moveahead in our journey to be one of the global players in specialized denim and premium yarnsegment. I would like to thank all our stakeholders for their support. I would like tothank our shareholders to put their trust on us our employees for their dedication andhard work and the board for their coordination and management. We look forward to a greatyear ahead with your continuous support.

L N Agarwal

Chairman